Chinese spies conspired to steal jet-engine technology, U.S. alleges

By Bloomberg

Oct 31, 2018 | 4:25 PM

Chinese and U.S. flags are displayed in Beijing. (Andy Wong / Associated Press)

The United States unveiled charges against two alleged Chinese spies, accusing them of orchestrating a conspiracy to steal prized jet-engine technology from private companies — including in Los Angeles — as the Trump administration raises pressure on Beijing to address its trade grievances.

The U.S. Justice Department said Tuesday that the Chinese intelligence officers worked with hackers and “co-opted company insiders” to acquire commercial aviation technology in a campaign of computer intrusions that lasted more than five years. They sought to obtain intellectual property and confidential business data, including information related to a turbofan engine used in commercial airliners, the government said.

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The case comes amid growing trade friction between the United States and China and follows on the heels of another case in which a Chinese intelligence official was extradited from Belgium and charged with conspiring to steal trade secrets from an Ohio aviation company this month. And a U.S. Army recruit was indicted in September for working as an agent of a Chinese intelligence officer.

Intellectual property theft is among the Trump administration’s chief complaints in a trade war that has rattled global markets and seen the world’s two largest economies slap tariffs on hundreds of billions of dollars’ worth of each other’s goods. China has long been focused on acquiring advanced jet-engine technology in its efforts to close the gap with Western manufacturers on the production of commercial and military aircraft.

‘Concerted effort’

“This action is yet another example of criminal efforts by [China’s Ministry of State Security] to facilitate the theft of private data for China’s commercial gain,” U.S. Atty. Adam Braverman, of the Southern District of California, said in a statement. “The concerted effort to steal, rather than simply purchase, commercially available products should offend every company that invests talent, energy and shareholder money into the development of products.”

Chinese Ministry of Foreign Affairs spokesman Lu Kang waved off the allegations, calling them “purely groundless and fabricated” at a regular news briefing Wednesday in Beijing.

The turbofan engine mentioned in the latest case was being developed through a partnership between a French aerospace manufacturer with an office in Suzhou, in the eastern province of Jiangsu, and a company based in the United States. The first alleged hack took place no later than January 2010, when members of the group infiltrated Capstone Turbine, a Los Angeles gas turbine company, the department said in the statement.

Alleged spies

Among 10 individuals charged were two people the United States identified as spies working for the Jiangsu provincial arm of the Chinese security ministry. Division Director Zha Rong, also known as “Leanov,” and Section Chief Chai Meng, also called “Cobain,” were each charged with one count of gaining unauthorized access to a protected computer, according to the indictment dated Oct. 25.

For decades, China has sought to develop its own commercial jet to break the duopoly held by Airbus SE and Boeing Co. In 2016, it set up state-owned engine maker Aero Engine Corp. of China to develop engines to be fitted on homegrown commercial aircraft.

Beijing’s Made in China 2025 blueprint specifically identifies aerospace as a key sector that can help match or exceed the high-end manufacturing output of countries such as Germany, Japan and the United States. Trump administration demands that China roll back support for the plan have been a major sticking point in discussions to resolve the trade dispute.